The Association of Consumers and Small Power Producers – ACMPE, newly established, considers that the adoption of the ANRE Order regarding the obligation to inform the final customers through the “Comparator of the Electricity Supply Bids” is one of the worst ideas. “The forceful transformation of a tool explicitly meant to inform in a mandatory one and, above all, making these bids legally opposable, will actually mean a big step backwards in the process of market liberalization and a reduction, not an increase in the market competition,” ACMPE said.
The Association asserts that “from the perspective of the competitive suppliers, imposing the Comparator as a compulsory tool and making these bids legally opposable would be an economic anticompetitive measure, a brutal and abusive interference in the most important aspects of their business, namely the right to formulate their offers taking into account many other criteria outside the price, notably the profile of the consumer curve and the consumer’s creditworthiness”.
ACMPE was set up this year to represent consumer interests and to support small producers in effectively managing their own power outputs. Of the thirteen founding members, three have experience in supply, and five in distribution.
ACMPE insists on that the draft Order should have contained a detailed presentation of the future comparator, especially since the present one “is not actually an offer comparator, but a price comparator.”
See the price comparator for electricity!
See the price comparator for natural gas!
Such a mechanism, considers ACMPE, ignores many aspects of the problem in an unacceptable and harmful manner.
“From the consumer perspective, the many benefits of a market liberalization process that has been taken place over the last 10 years include increasing the level of competition in the supply market at exceptional levels. The large number of active suppliers and the competition between them has attracted a large and diverse range of offers that would have been unimaginable just a few years ago.
The variety of offers should be encouraged
There are numerous combined offers of electricity and natural gas; there are deals that include specialized value-added services; there are offers that guarantee a certain amount of green energy in the energy delivered to the consumer, differentiated offers based on hour or season, bids that reward certain consumer profiles, offers that also depend on the accepted payment terms, as well as the length of the contract, there are offers which take into account guarantees and compensations, offers that include “hooks” such as monthly subscription, reserve fee or sale of household appliances at discounted prices, and the list could continue with many other features through which suppliers seek to differentiate one from another, and at the same time make their best to meet the needs of consumers.
Simplifying this remarkable diversity to just two criteria – the price and the volume of consumption – is likely to confuse consumers (who will wrongly conclude that price is the only one that matters and they have nothing else to choose from), it will discourage innovation from the suppliers, and will only lead to a fake competition between energy suppliers, instead of a real competition.”
When price is the only criterion, there is less competition
ACMPE believes that “in markets where the commodity / service price is virtually the only criterion of choice, large suppliers, especially those of last resort, will be favored again, to the detriment of competitive suppliers”.
On the other hand, the Association accepts that the development of a comparator of offers which would include many criteria would transform it in a “complicated, cumbersome, practically impossible to use” instrument.
ACMPE proposals
- ANRE should abandon the initiative as it is set out in the draft Order, while ensuring that all supplier contact data is real, up-to-date and easily accessible to consumers
- First the needs should be clarified in respect to the bids structure, both from the perspective of suppliers and consumers, so that the result meets all the requirements of the parties involved, including the imposition of fair reciprocal conditions in the consumer-supplier relationship, increase the consumer’s and supplier’s trust in a commercially relationship which, at present is asymmetric and one-sided
- In the worst case scenario, the present Comparator should be maintained as it is – an informative tool that encompasses all suppliers, and clearly display suppliers who do not provide this service to final consumers; no obligation should be imposed upon suppliers to contract based on their bids
- A special section of the ANRE website might present, as an example, for each supplier wishing to do so, a limited number of offers that it considers attractive and relevant to the targeted consumer segment. The bids should be brief, but in a format agreed by ANRE with the respective provider, format that should meet not only what the regulator considers to be, but also those deemed relevant by the supplier